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Matt Patsky, Trillium Asset Management CEO, on how Trillium filed a shareholder proposal with Citigroup for the Benedictine Nuns, asking the board to ...
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To the CEO resigned Citigroup lot of you on the stock it's widely held is getting hit with a shareholder proposal from a group.
Of Benedict team nuns and another group called -- me that involves state and municipal and local workers -- the proposal calls for the company.
To explore a separation of one or more of its businesses.
Why did the sisters -- the proposal here to break at all down is the guy who help them do this -- -- give trillium asset management he's the CEO -- filed a proposal.
On behalf of the two groups -- -- The nuns right what what and what's -- -- -- If they we have a lot of shareholders obviously who are concerned about the issues around environmental social profiles of companies and we try to work on improving them.
In this case we had what we considered a win across all categories of environmental social and and potential returns for shareholders because.
We think there's unless there's an ability unlock value here.
When we look at the potential component parts but the nuns have a group of it they have an investment fund with you fit the nuns have their retirement assets with us and and this is for group of nuns.
In Kansas and they are very concerned about at their fiduciary obligation to.
All of the nuns who have for whom this is -- retirement plan and and and we've helped them and looking at.
In looking in financial services that -- Citigroup is one of the options for that for them to own and and now we've been working on.
How that we increased value at Citigroup.
We'll -- is that -- they say in god we trust all others must pay cash or at least stocks that are valuable so in what way do you think.
Citigroup should be broken up which pieces should be ripped off and move to separate entities that would unlock that shareholder value.
Right I mean we've looked at it and number of different ways.
And and really are asking that -- the board take that on to look and examine the different ways but.
When you look at for example Morgan Stanley spin off of discover card.
And look at that value creation in that year after.
You sort of can see the kind of power of spinning it off and of course you know the former CEO Morgan Stanley.
Has already been public about the fact that the credit card business of Citigroup should be spun off.
He thinks that would be great for value creation and for simplifying the Citigroup.
Business model Citigroup has lost so much since Vikram Pandit was the CEO he of course was just.
Get booted out of -- call you Charlie Gasparino says has pushed out.
But while he was the CEO the stock went up 89% we now Michael Corbett the new CEO don't you have -- that we'll figure this out.
-- Michael Corbett has been incredibly talented -- getting in selling off noncore assets for Citigroup under Citigroup holdings.
I'm so he's been doing a great job and that division he ran and we think he'll do a fantastic job the CEO.
We actually are are very hopeful that he'll be responsive to the shareholders.
And and and to looking at this as an option.
Who is a little bit of a travesty and here's why it's really good company I always say I'm a client on -- there and and I love their online big everything about it and their global that one of the few banks that is just you.
Air drop down into Moscow and -- -- Citibank anywhere it's -- so why is it traded below book value since 2008.
Why have they been date they did not pass the most recent stress tests in March right.
That's ridiculous for a company that's supposed to be run so well -- agreed so do you really need independent directors we need new directors what are you agitated for while we.
We think I mean I'm I'm not suggesting that we need to replace the board I am suggesting that they may want to look carefully at the business and realize that.
Perhaps too big to fail as they've been labeled as too big to manage.
And they should be looking at how do you break it into pieces that are manage a ball.
And where we can see clear lines of business where we can have -- parables where we can -- multiple expansion.
If you look at you know the four core businesses of retail bank investment bank trust bank and a credit card business.
This should trade in at least 50% premium to where it is now.
So.
It's up 30% over the past year but the price to earnings ratio is a mere seven that makes it cheap but for some reason.
People are not piling in it's not moving higher right right I think there's still.
Concern over the complexity and management of risk let me just say if that they have not responded to you.
All day long -- since you filed this however Shannon bell who has a spokesperson.
Did say which put out a statement that she said look -- -- -- lot we've not only reduced unwanted assets by more than 600 billion since the financial crisis began.
But our capital buffers are among the highest in the industry can regardless it's still -- moving stock.
Right agreed and then there's a lot more opportunity and we really look at both the new CEO.
And the new chair has opportunities to have the board look at that's because the new chair.
-- and done a great job at that Bank of Hawaii and really focusing them on their core business.
Let's hope he does the same at Citigroup the sisters of the panic to eighteen months but that's incredible what do uninteresting story will if they can't get Citi to move friend.
Nobody can thank you very much about -- -- up trillium asset management he's the CEO.
